Jim Cramer Discussed These 11 Restaurants and Retail Stocks

2. Costco Wholesale Corporation (NASDAQ:COST)

Number of Hedge Fund Holders: 75

Discussing Costco Wholesale Corporation (NASDAQ:COST), Cramer remarked:

“Now there are some straddlers that seem to please everybody like Costco and Chipotle, maybe that’s why their stocks have such high price-to-earnings multiples… Costco appeals to anyone who has enough space at home to take advantage of its bulk merchandise.”

Costco (NASDAQ:COST) operates a membership-based warehouse model that offers a wide array of branded and private-label products, with a focus on bulk sales, which provides customers with significant value. The company’s business model has made it a popular choice for shoppers looking to purchase items in larger quantities at lower prices.

During the first quarter of its fiscal 2025 earnings call, Chief Financial Officer Gary Millerchip shared insights into current consumer behavior. He noted that while customers have become more selective with their purchases, they are still willing to spend, particularly as inflation subsides. Shoppers are showing a preference for products that offer a combination of novelty, quality, and value.

Millerchip also pointed out a shift in spending habits, with some customers continuing to purchase higher-end products, like premium cuts of meat, while others are opting for more affordable options across categories such as poultry, beef, and pork. Moreover, Costco’s (NASDAQ:COST) membership base has seen significant growth. The company ended the quarter with 77.4 million paid household members, reflecting an 8% year-over-year increase. Additionally, the retailer reported a total of 138.8 million cardholders.